No. Section 11 of the Company Directors Disqualification Act 1986 makes it a criminal offence for an undischarged bankrupt to act as a director, or take part directly or indirectly in promoting, forming or managing a company, without the permission of the court. The bar usually ends on discharge, which is normally 12 months after the bankruptcy order, unless a bankruptcy restrictions order or undertaking extends it.

Who does the section 11 bar cover?

Section 11(1) of the Company Directors Disqualification Act 1986 (CDDA) makes it an offence to act as a director of a company, or directly or indirectly to take part or be concerned in its promotion, formation or management, without the leave of the court, while any of the circumstances in section 11(2) apply. They are:

  • being an undischarged bankrupt in England and Wales, Scotland or Northern Ireland;
  • being subject to a bankruptcy restrictions order or undertaking;
  • being subject to a debt relief restrictions order or undertaking; or
  • being in the moratorium period of a debt relief order.

Unlike a disqualification, nothing has to be proved about the person’s conduct: the bar follows automatically from the bankruptcy. Section 11(4) extends “company” to a company incorporated outside Great Britain that has an established place of business here, and the official receivers’ technical guidance confirms the bar applies to being a member of a limited liability partnership too. For a broader picture of what bankruptcy restricts, see personal bankruptcy basics.

The bar is about directing and managing companies, not about working. GOV.UK says a bankrupt can run a business, provided they tell people they do business with the name in which they were made bankrupt.

What happens to directorships held when the bankruptcy order is made?

Two separate rules apply:

  1. The articles. Under paragraph 18(b) of the model articles for private companies limited by shares, a person ceases to be a director as soon as a bankruptcy order is made against them. A company with bespoke or older articles needs to check its own wording.
  2. The offence. Even if the articles say nothing, continuing to act after the order is an offence under section 11 unless the court gives permission.

In practice the director should stop acting immediately and the company should record the termination at Companies House. Where the bankrupt was the only director, the shareholders need to appoint a replacement quickly, which is often the hardest part in an owner managed company: see decisions in a sole director company.

How does a bankrupt apply for permission to act?

In England and Wales the application goes to the court that made the bankruptcy order or, if the order was made by the adjudicator rather than a court, the court to which the debtor could appeal a refusal (section 11(2A)). In Scotland it goes to the court that awarded sequestration, or which would have jurisdiction if the award was made otherwise than by the court.

In England and Wales, rule 10.128 of the Insolvency (England and Wales) Rules 2016 requires a witness statement identifying the company and specifying:

  • the nature and location of its business or intended business;
  • whether it is or will be a private or public company;
  • the people principally responsible for running it, whether as directors, shadow directors, managers or otherwise;
  • the manner and capacity in which the applicant proposes to be involved; and
  • the emoluments and other benefits the applicant will receive.

Rule 10.129 then sets the timetable:

Step Deadline
Bankrupt sends notice of the hearing, the application and the witness statement to the official receiver and any trustee Not less than 28 days before the hearing
Official receiver may file a report of points the court should consider Not less than 14 days before the hearing
Bankrupt may file a notice disputing statements in the report Not later than 5 business days before the hearing
Bankrupt sends copies of that notice to the official receiver and trustee Not less than 3 business days before the hearing

Section 11(3) says permission cannot be given unless notice has been served on the official receiver, who must attend and oppose the application if they think granting it would be contrary to the public interest. The official receiver and trustee may make representations and question the bankrupt at the hearing.

When does the bar end?

Under section 279 of the Insolvency Act 1986 a bankrupt is discharged at the end of one year beginning with the date the bankruptcy commences. GOV.UK says that after 12 months you are usually released automatically, but it can take longer if you do not cooperate with the trustee: on the application of the official receiver or trustee, the court can suspend the discharge period until a set date or condition is met (section 279(3)). Once discharged, the section 11 bar no longer applies on the ground of bankruptcy, and annulment of the bankruptcy order ends it as well.

The bar continues if a bankruptcy restrictions order (BRO) or undertaking (BRU) is made, because these are separate circumstances in section 11(2). The official receivers’ guidance says a BRO or BRU lasts between 2 and 15 years, and applies even after discharge. GOV.UK says the official receiver can seek one if they believe the bankrupt acted carelessly or dishonestly.

Discharge does not wipe out every consequence. Directors whose company also failed may face separate disqualification proceedings, covered in being a director after liquidation.

What are the penalties for acting while bankrupt?

Under section 13 of the CDDA, an offence under section 11 is punishable on indictment by up to 2 years’ imprisonment, a fine, or both, and on summary conviction by up to 6 months, a fine, or both. Under section 15, the bankrupt becomes personally responsible, jointly and severally with the company, for debts incurred while they were involved in management. Anyone involved in management who acts on instructions from a person they know to be an undischarged bankrupt, without the court’s permission, is also personally responsible for debts incurred while doing so. See what happens if you act while disqualified, where the same sections apply.

How might this work in practice?

Illustration only. Mark is a director and 50% shareholder of a joinery company that is trading well. He is made bankrupt after a personal guarantee on an earlier business is called in. The company uses the model articles, so his directorship ends on the day of the order, and his business partner Jo becomes the only director.

The company needs Mark’s estimating work, so he continues as an employee working under Jo’s direction, with no say over the bank account, suppliers or staff. Twelve months later Mark is discharged; no BRO has been sought, so the shareholders can reappoint him. If the company had needed Mark on the board sooner, he could have applied to the bankruptcy court with a witness statement under rule 10.128, giving the official receiver at least 28 days’ notice.

What mistakes are common?

  • Resigning the directorship but carrying on managing the company under another title, which is still an offence.
  • Assuming the bar ends automatically on discharge when a BRO, BRU or suspended discharge applies; check the Individual Insolvency Register.
  • Thinking a debt relief order is different: its moratorium period triggers the same bar.
  • Applying for permission without the specific company details rule 10.128 requires.
  • Letting a fellow director take instructions from the bankrupt, exposing them to personal liability.

For the wider eligibility rules, see who can be a company director.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.